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Tax Incentives

Energy efficiency improvements can reduce your Montana tax bill as well as your monthly energy bills.

  • Add insulation to your ceilings or floors…
  • Purchase storm windows or new Low-E window replacements…
  • Install a programmable or set-back thermostat…
    …and qualify for the Montana Energy Conservation Tax Credit!

How much is the tax credit?

Montana homeowners are eligible for a tax credit for a portion of the costs of installing additional insulation, caulking materials or other measures that reduce energy use and lower your utility bills. The amount of the tax credit is 25 percent of the investments you make to improve the energy efficiency of your home. The maximum amount of the credit for each tax year is $500. 

What conservation investments qualify?

The Montana Department of Revenue has determined that all of the following conservation investments are eligible for the credit:

  • For existing homes: insulating floors, walls and ceilings
  • High efficiency heating systems (Energy Star rated)
  • For new homes: insulation added to floors, walls, and ceilings above established standards of construction
  • Insulating duct work or piping in non-heated areas
  • Hot water tank insulation blankets
  • Storm windows
  • Programmable or set-back thermostats
  • Replacement of incandescent light fixtures with high efficiency lighting fixtures
    (Please note: this applies only to permanent fixtures, not to efficient light bulbs such as compact fluorescents installed in existing fixtures)

This is a partial listing of qualifying investments.

Does the tax credit apply to new construction or remodeling?

The Energy Conservation Tax credit can be used both for new construction and remodeling projects. However, for new construction and remodeling projects the tax credit is allowed ONLY for the portion of the cost and materials that is above established standards of construction.

How do I apply for the credit?

You apply for the tax credit by completing tax form "ENRG-C" for individual income taxpayers. The energy conservation credit is allowed ONLY for the year the energy conservation improvements are placed in service.

Click here to get the Montana Department of Revenue tax forms

Montana Energy Code

The 2003 International Energy Conservation Code defines the established standards of construction that must be EXCEEDED if you are claiming a tax credit for new construction projects. The minimum insulation levels are as follows:

  • R-49 Ceiling insulation
  • R-21 Wall insulation (above-grade walls)
  • R-11 Basement wall (below-grade finished basements only)
  • R-21 Crawlspace floor insulation or R-20 crawlspace wall insulation
  • Window U-value less than 0.35